Physical Silver Coins for Investors

Silver coins are the most demanded form of silver, and because of this, they are also the most expensive. Industrial and investment demand for silver will always be in place, and this is what constitutes the spot (or fair market value) price of silver itself. Coins, on the other hand, have a value that supersedes the market value of raw silver. A basic piece of bullion is only worth its weight in terms of actual silver content, whereas a coin has value added based on its level of collectibility.

What is a Silver Coin?

A coin is not necessarily any piece of silver that is round. A coin must be made by a country or a government body, otherwise it is just another piece of bullion. Look at it this way. If you can, provided the needed tools and equipment, create a round on your own, it will never be considered a coin.

If, however, the only people who make a particular item are government mints, you have a coin. Some of the most popular examples of coins in the world today include the American Eagle (created by the United States), and the Canadian Maple Leaf (created by Canada). Though there are many, many other coins in addition to these two, they are a few of the most popular editions that most everyone tends to recognize, whether or not they are interested in silver.

Types of Coins

Coins are available and produced by a number of different countries around the world. There are roughly 10 different coins that are commonly traded in today's markets. Though there are some rare and less common coins that are not typically found at most dealers, the following coins are the most readily available and in demand silver coins.

Brilliant Uncirculated Silver Coins

A brilliant uncirculated silver coin is the most common condition and type of coin that will be found at any store or dealer. An uncirculated coin means that the item was produced, sold to distributors, and then re-sold to the end consumers and buyers. The uncirculated element means that they were not sent to banks or anywhere else to actually be used as everyday currency. The change in your pocket would not ever be considered brilliant uncirculated, whereas a new Silver Eagle would (provided it does not fall into one of the categories below).

Brilliant uncirculated coins will be in premier condition (at least initially), but can be handled by human hands and will often times have slight imperfections. They are near the lowest quality grade that any modern era coins come from that are readily purchased by collectors. A brilliant uncirculated coin is ideal for the buyer who is making an investment, but would also like to be diversified in the types of silver that they own. Because they have a minimal level of rarity when compared to other coins, they do not typically carry a price that is more than a few dollars over spot.

Proof Silver Coins

A proof coin is the highest quality of silver that is produced by mints. A proof coin is very easy to distinguish from generic coins, especially when they are compared to each other side by side. A proof coin is very shiny and has meticulous detail that is incredibly noticeable.

A lot of extra time and effort goes into the production of the proof version of any coin, which is one of the primary reasons why they are so valuable. The creation of a proof coin involves a process where the coin is actually struck twice by the die, which in turns makes all of the cuts and markings that much more detailed. Proof coins will almost always cost a fair amount more than their uncirculated counterparts, but the upgrade in quality is more than visible to the human eye.

Rare Coins

Rare coins are not defined by any specific inherent qualities. Instead, a rare coin is a product of the markets. A coin that is hundreds of years old, for example, is often times very highly sought after. The newest release of a Chinese Panda, on the other hand, would never be considered particularly rare. Rare coins will have values that not only exceed the spot price of silver, but will on some occasions be worth hundreds or even thousands more than the value per ounce.

The worth of these coins is derived minimally from the content of silver itself. The real value is found in their absolute scarcity and unmatched demand on the secondary market. Anyone who buys rare coins for investment purposes is seldom investing in silver so much as they are investing in the coins rarity and the likely increase in demand over a time. If silver jumps $15 per ounce in value, that will have relatively little effect on a $1,000 rare coin. If the demand for a $1,000 coin doubles, though, your investment will too have doubled due to this demand. Rare coins are very much a matter of collectibility and are a world and market in and of themselves.

Graded Coins

Graded coins are coins that are encapsulated and assigned a grade based on their condition. A graded coin is thoroughly inspected by numismatic and conditional experts for a number of different qualities. First, having a coin graded by a reputable company will ensure that it is actually authentic. For this reason alone, aside from condition, many high dollar, rare coins are slabbed (another word for graded) to ensure a potential buyer that they are indeed real. This cures any doubts about the possibility of a coin being fake.

Beyond authenticity, condition is an incredibly important characteristic of any coin. Graded coins are given a definitive grade, which is an indicator of the exact coin in question. Since condition is of the utmost to collectors, grading has become incredibly popular. PCGS and NGC are the two most well-known companies who grade and authenticate coins. If you are shopping for a high-end coin that is graded by somewhere else, be very weary of paying a high price. Graded coins can increase the value of any item and will also offer peace of mind to potential buyers.